UMC Reports First Quarter 2017 Results

Board of Directors propose NT$0.50 per share cash dividend; anticipate flat 2Q17 outlook

First Quarter 2017 Overview¹:

• Revenue: NT$37.42 billion (US$1.24 billion)
• Gross margin: 19.9%
• Foundry revenue from 28nm: 17%; Foundry operating margin: 4.0%
• Foundry capacity utilization rate: 96%
• Net income attributable to the stockholders of the parent: NT$2.29 billion (US$75.42 million)
• Earnings per share: NT$0.19; earnings per ADS: US$0.031

TAIPEI, Taiwan--(BUSINESS WIRE)--United Microelectronics Corporation (NYSE: UMC; TWSE: 2303) (“UMC” or “The Company”), a leading global semiconductor foundry, today announced its consolidated operating results for the first quarter of 2017.

First quarter consolidated revenue was NT$37.42 billion, down from NT$38.31 billion in 4Q16 and up 8.8% YoY from NT$34.40 billion in 1Q16. 1Q17 consolidated gross margin was 19.9%. Net income attributable to the stockholders of the parent was NT$2.29 billion, with earnings per ordinary share of NT$0.19.

Mr. Po-Wen Yen, CEO of UMC, said, “In the first quarter of 2017, UMC’s revenue from foundry operations was NT$37.35 billion. Robust chip demand lifted overall capacity utilization to 96%, bringing wafer shipments to 1.68 million 8-inch equivalent wafers. Gross margin was 20.1%. During the quarter, the utilization rates in 8” fabs as well as 12” advanced nodes approached near full capacity, driven by the strength in consumer and communication segments. Recently, Taiwan’s government authorities approved UMC’s application to license 28nm technology to our subsidiary company, United Semiconductor in Xiamen. This licensing approval will help Fab 12X to ramp its manufacturing scale, expand its process technology offerings and complements UMC’s overall growth strategy. The production ramp of Fab 12X will also help our customers diversify their foundry manufacturing and enhance UMC’s exposure to the Chinese semiconductor supply chain.”

CEO Yen continued, “Looking into the second quarter, despite recent headwinds in foreign exchange markets, we anticipate a relatively flat outlook for 2Q17. Furthermore, current forecasts reflect a pick-up in mature 12” wafer business due to higher demand from wireless, internet of things (IoT) and consumer electronics. However, the increased demand in legacy 300mm wafer shipments will be offset by a decline in 28nm business. In terms of advanced nodes, we started shipping 14nm wafers to customers in the first quarter of 2017. As we transition from 28nm to 14nm manufacturing, we expect our 14nm shipments to sequentially increase in 2Q17. With our manufacturing technologies making steady progress, we continue to strike a balance between maintaining disciplined CAPEX planning while ensuring the interests of our shareholders. As a result, our board of directors has proposed a cash dividend distribution of approximately NT$0.50 per share, which will be subject to shareholders’ approval during UMC’s Annual General Meeting on June 8, 2017.”

Summary of Operating Results

Operating Results
(Amount: NT$ million)	1Q17		4Q16		QoQ % change		1Q16		YoY % change
Net Operating Revenues	37,418		38,306		(2.3	)	34,404		8.8
Gross Profit	7,428		8,759		(15.2	)	5,034		47.6
Operating Expenses	(6,211	)	(6,627	)	(6.3	)	(5,065	)	22.6
Net Other Operating Income and Expenses	154		144		6.9		15		926.7
Operating Income (Loss)	1,371		2,276		(39.8	)	(16	)	-
Net Non-Operating Income and Expenses	(304	)	(1,210	)	(74.9	)	46		-
Net Income Attributable to Stockholders of the Parent	2,286		2,548		(10.3	)	210		988.6
EPS (NT$ per share)	0.19		0.21				0.02
(US$ per ADS)	0.031		0.035				0.003

In 1Q17, net operating revenues decreased 2.3% to NT$37.42 billion, including NT$37.35 billion from the foundry segment. Revenue from 28nm and 40nm contribution was 17% and 29%, respectively. Gross profit declined 15.2% to NT$7.43 billion, or 19.9% of revenue. Operating expenses decreased 6.3% to NT$6.21 billion. Net other operating income was NT$154 million, leading to an operating income of NT$1.37 billion. Net non-operating expense was NT$304 million. Net income attributable to stockholders of the parent was NT$2.29 billion.

Earnings per ordinary share for the quarter was NT$0.19. Earnings per ADS was US$0.031. The basic weighted average number of outstanding shares in 1Q17 was 12,208,239,978, compared with 12,208,239,978 shares in 4Q16 and 12,408,239,978 shares in 1Q16. The diluted weighted average number of outstanding shares was 13,418,016,296 in 1Q17, compared with 13,442,173,503 shares in 4Q16 and 12,492,270,590 shares in 1Q16. The fully diluted share count on March 31, 2017 was approximately 13,834,095,000. On March 31, 2017, UMC held 400 million treasury shares acquired from the 16th and 17th share buy-back programs.

Detailed Financials Section

COGS & Expenses
(Amount: NT$ million)	1Q17		4Q16		QoQ % change		1Q16		YoY % change
Net Operating Revenues	37,418		38,306		(2.3	)	34,404		8.8
COGS	(29,990	)	(29,547	)	1.5		(29,370	)	2.1
Depreciation	(11,032	)	(11,314	)	(2.5	)	(10,424	)	5.8
Other Mfg. Costs	(18,958	)	(18,233	)	4.0		(18,946	)	0.1
Gross Profit	7,428		8,759		(15.2	)	5,034		47.6
Gross Margin (%)	19.9	%	22.9	%			14.6	%
Operating Expenses	(6,211	)	(6,627	)	(6.3	)	(5,065	)	22.6
G&A	(1,050	)	(1,521	)	(31.0	)	(970	)	8.2
Sales & Marketing	(1,170	)	(1,282	)	(8.7	)	(1,010	)	15.8
R&D	(3,991	)	(3,824	)	4.4		(3,085	)	29.4
Net Other Operating Income & Expenses	154		144		6.9		15		926.7
Operating Income (Loss)	1,371		2,276		(39.8	)	(16	)	-

Net operating revenues decreased to NT$37.42 billion. COGS increased to NT$29.99 billion, as depreciation declined 2.5% to NT$11.03 billion. Other manufacturing costs rose 4.0% to NT$18.96 billion, including the production ramp costs associated with Fab 12X. Gross profit was NT$7.43 billion. Operating expenses declined 6.3% to NT$6.21 billion. G&A expense decreased 31% to NT$1.05 billion and Sales & Marketing declined by 8.7% to NT$1.17 billion. R&D expense increased 4.4% to NT$3.99 billion, or 10.7% of net operating revenues. Net other operating income was NT$154 million, leading to an operating income of NT$1.37 billion.

Non-Operating Income and Expenses
(Amount: NT$ million)	1Q17		4Q16		1Q16
Non-Operating Income and Expenses	(304	)	(1,210	)	46
Net Interest Income and Expenses	(472	)	(418	)	(57	)
Net Investment Gain and Loss	166		(1,138	)	(14	)
Gain and Loss on Disposal of Investment	488		1,023		223
Exchange Gain and Loss	(517	)	(496	)	(167	)
Other Gain and Loss	31		(181	)	61

Net non-operating expense in 1Q17 was NT$304 million. The NT$488 million gain on disposal of investment was offset by the NT$517 million exchange loss recognized in 1Q17. Net interest expense totaled NT$472 million.

Cash Flow Summary
(Amount: NT$ million)	For the 3-Month Period Ended Mar. 31, 2017		For the 3-Month Period Ended Dec. 31, 2016
Cash Flow from Operating Activities	13,311		15,546
Net income before tax	1,067		1,066
Depreciation & Amortization	13,292		13,376
Gain on disposal of investments	(488	)	(1,023	)
Impairment loss on financial assets	287		233
Impairment loss on non-financial assets	-		837
Exchange loss (gain) on financial assets and liabilities	(624	)	1,114
Changes in working capital	580		(164	)
Income tax paid	(451	)	(146	)
Other	(352	)	253
Cash Flow from Investing Activities	(16,293	)	(18,321	)
Capital expenditures	(17,654	)	(21,905	)
Proceeds from disposal of AFS financial assets	701		1,582
Acquisition of investments accounted for under the equity method	-		(840	)
Acquisition of intangible assets	(378	)	(316	)
Other	1,038		3,158
Cash Flow from Financing Activities	7,845		4,221
Bank loans	783		4,230
Bonds Issued	8,300		-
Other	(1,238	)	(9	)
Effect of Exchange Rate	(1,630	)	867
Net Cash Flow	3,233		2,313

Cash inflow from operating activities reached NT$13.31 billion. Cash outflow from investing activities totaled NT$16.29 billion, including NT$17.65 billion in CAPEX spending for the foundry segment, resulting in a free cash outflow of NT$4.34 billion. Cash inflow from financing activities was NT$7.85 billion, mainly due to a cash inflow of NT$8.30 billion in bond issuance. Net cash inflow in 1Q17 was NT$3.23 billion. Over the next 12 months, the company expects to repay NT$2.50 billion in bank loans.

Current Assets
(Amount: NT$ billion)	1Q17	4Q16	1Q16
Cash and Cash Equivalents	60.81	57.58	59.54
Notes & Accounts Receivable	20.88	23.05	19.65
Days Sales Outstanding	54	54	52
Inventories, net	16.26	17.00	15.84
Days of Inventory	51	53	52
Total Current Assets	111.54	110.47	101.92

Cash and cash equivalents increased to NT$60.81 billion, mainly due to NT$8.30 billion in bond issuance. Days of inventory decreased to 51 days.

Liabilities
(Amount: NT$ billion)	1Q17		4Q16		1Q16
Total Current Liabilities	66.87		71.98		41.63
Notes & Accounts Payable	6.44		6.85		6.32
Short-Term Credit / Bonds	36.34		31.05		11.74
Payable on Equipment	6.41		15.04		8.25
Other	17.68		19.04		15.32
Long-Term Credit / Bonds	62.31		60.73		48.72
Long-Term Investment Liabilities	19.47		20.31		19.28
Total Liabilities	162.70		167.91		116.49
Debt to Equity	75	%	77	%	51	%

Current liabilities decreased to NT$66.87 billion, mainly due to the decrease in payable on equipment. Short-term credit/bonds increased to NT$36.34 billion. Total liabilities decreased to NT$162.70 billion, leading to a debt to equity ratio of 75%.

Analysis of Revenue² for Foundry Segment

Revenue Breakdown by Region
Region	1Q17		4Q16		3Q16		2Q16		1Q16
North America	41	%	48	%	52	%	49	%	48	%
Asia Pacific	50	%	45	%	42	%	45	%	45	%
Europe	5	%	4	%	4	%	4	%	3	%
Japan	4	%	3	%	2	%	2	%	4	%

Revenue from Asia Pacific customers increased to 50% of sales, while revenue contribution from North American customers decreased to 41%.

Revenue Breakdown by Geometry
Geometry	1Q17		4Q16		3Q16		2Q16		1Q16
28nm and below	17	%	22	%	21	%	17	%	8	%
28nm<x<=40nm	29	%	26	%	27	%	26	%	29	%
40nm<x<=65nm	13	%	14	%	15	%	18	%	19	%
65nm<x<=90nm	4	%	3	%	4	%	4	%	4	%
90nm<x<=0.13um	11	%	11	%	11	%	11	%	12	%
0.13um<x<=0.18um	13	%	11	%	11	%	12	%	13	%
0.18um<x<=0.35um	10	%	10	%	8	%	9	%	12	%
0.5um and above	3	%	3	%	3	%	3	%	3	%

28nm revenue declined to 17% in 1Q17, reflecting lower wafer shipments for the communication segment. 40nm accounted for 29% of sales.

Revenue Breakdown by Customer Type
Customer Type	1Q17		4Q16		3Q16		2Q16		1Q16
Fabless	93	%	93	%	93	%	93	%	91	%
IDM	7	%	7	%	7	%	7	%	9	%

Revenue from fabless customers remained at 93% in 1Q17.

Revenue Breakdown by Application ^(1)
Application	1Q17		4Q16		3Q16		2Q16		1Q16
Computer	12	%	13	%	12	%	11	%	15	%
Communication	51	%	53	%	55	%	55	%	48	%
Consumer	28	%	26	%	26	%	27	%	30	%
Others	9	%	8	%	7	%	7	%	7	%

Communication business represented 51% of sales, while consumer business increased to 28%. Computing segment decreased to 12%.

⁽¹⁾ Computer consists of ICs such as CPU, GPU, HDD controllers, DVD/CD-RW control ICs, PC chipset, audio codec, keyboard controller, monitor scaler, USB, I/O chipset. Communication consists of handset components, broadband, WLAN, bluetooth, Ethernet, LAN, DSP, etc. Consumer consists of ICs used for DVD players, DTV, STB, MP3/MP4, flash controller, game consoles, DSC, smart cards, toys, etc.

Blended ASP Trend for Foundry Segment

Blended average selling price (ASP) decreased during 1Q17.

(To view ASP trend, visit http://www.umc.com/english/investors/1Q17_ASP_trend.asp)

Shipment and Utilization Rate³ for Foundry Segment

Wafer Shipments
	1Q17		4Q16		3Q16		2Q16		1Q16
Wafer Shipments (8” K equivalents)	1,678		1,656		1,569		1,514		1,432
Quarterly Capacity Utilization Rate
	1Q17		4Q16		3Q16		2Q16		1Q16
Utilization Rate	96	%	94	%	89	%	89	%	82	%
Total Capacity (8” K equivalents)	1,742		1,794		1,774		1,723		1,692

Wafer shipments increased to 1,678K in 1Q17. Quarterly capacity decreased 2.9% QoQ to 1,742K, leading to an overall utilization rate of 96% in 1Q17.

Capacity⁴ for Foundry Segment

Overall capacity in the first quarter was 1,742K 8-inch equivalent wafers. Estimated capacity in the second quarter will increase to 1,816K 8-inch equivalent wafers, primarily due to capacity expansion at Fab 12A and Fab 12X.

Annual Capacity in thousands of wafers											Quarterly Capacity in thousands of wafers
FAB		Geometry (um)	2016		2015		2014		2013		FAB	2Q17E	1Q17	4Q16	3Q16
WTK	6"	3.5 – 0.45	423		421		448		448		WTK	106	104	106	106
Fab 8A	8"	0.5 – 0.25	827		813		813		813		Fab 8A	207	204	207	207
Fab 8C	8"	0.35 – 0.11	348		347		347		347		Fab 8C	87	86	87	87
Fab 8D	8"	0.13 – 0.09	342		341		358		382		Fab 8D	86	84	86	86
Fab 8E	8"	0.5 – 0.18	419		418		418		418		Fab 8E	105	103	105	105
Fab 8F	8"	0.18 – 0.11	401		388		388		388		Fab 8F	102	100	102	102
Fab 8S	8"	0.18 – 0.11	336		335		335		335		Fab 8S	84	83	84	84
Fab 8N	8"	0.5 – 0.11	750		667		547		469		Fab 8N	188	185	188	188
Fab 12A	12"	0.13 – 0.028	885		793		700		651		Fab 12A	247	226	233	233
Fab 12i	12”	0.13 – 0.040	584		572		573		550		Fab 12i	134	137	148	148
Fab 12X	12”	0.040	9		-		-		-		Fab 12X	19	10	9	-
Total^(1)			6,983		6,617		6,323		6,107		Total	1,816	1,742	1,794	1,774
YoY Growth Rate			6	%	5	%	4	%	11	%

⁽¹⁾One 6-inch wafer is converted into 0.5625(6²/8²) 8-inch equivalent wafer; one 12-inch wafer is converted into 2.25(12²/8²) 8-inch equivalent wafers. Capacity total figures are expressed in 8-inch equivalent wafers.

CAPEX for Foundry Segment

Capital Expenditure by Year - in US$ billion
Year		2016		2015		2014		2013		2012
CAPEX	$	2.8	$	1.9	$	1.4	$	1.1	$	1.7
2012 figures account for UMC parent company only.

2017 CAPEX Plan
8"	12"	Total
9%	91%	US$2.0 billion

CAPEX spending in 1Q17 totaled US$564 million. Full year 2017 CAPEX plan is budgeted for US$2.0 billion.

Second Quarter of 2017 Outlook & Guidance

Quarter-over-Quarter Guidance:

• Wafer Shipments: To remain flat
• ASP in USD: To remain flat
• Profitability: Gross profit margin will be in the mid-teens % range
• Foundry Segment Capacity Utilization: Low 90% range
• 2017 CAPEX for Foundry Segment: US$2.0 billion

Recent Developments / Announcements

Apr. 13, 2017	UMC Files Form 20-F for 2016 with US Securities and Exchange Commission
Mar. 14, 2017	UMC and Synopsys Collaboration Speeds 14-nm Custom Design
Feb. 23, 2017	UMC Enters Mass Production for 14nm Customer ICs
Feb. 22, 2017	UMC Board of Directors Announces Proposals for its Annual Shareholders Meeting
Feb. 02, 2017	Panasonic and UMC Partner for 40nm ReRAM Process Platform
Jan. 23, 2017	UMC 4Q 2016 Financial Results

Please visit UMC’s website for further details regarding the above announcements

Conference Call / Webcast Announcement

Wednesday, April 26, 2017

Time: 5:00 PM (Taipei) / 5:00 AM (New York) / 10:00 AM (London)

Dial-in numbers and Access Codes:

USA Toll Free: 1-800 871-3110, 1-888 700-7397

Taiwan Number: 02-2192-8016

Other Areas: [phone]

Access Code: UMC

A live webcast and replay of the 1Q17 results announcement will be available at www.umc.com under the “Investors / Events” section.

About UMC

UMC (NYSE: UMC, TWSE: 2303) is a leading global semiconductor foundry that provides advanced IC production for applications spanning every major sector of the electronics industry. UMC’s comprehensive foundry solutions enable chip designers to leverage the company’s sophisticated technology and manufacturing, which include high volume 28nm High-K/Metal Gate technology, 14nm FinFET mass production, ultra-low power platform processes specifically developed for Internet of Things (IoT) applications and the automotive industry’s highest-rated AEC-Q100 Grade-0 manufacturing capabilities for the production of ICs found in vehicles. UMC’s 11 wafer fabs are strategically located throughout Asia and are able to produce nearly 600,000 wafers per month. The company employs over 19,000 people worldwide, with offices in Taiwan, China, Europe, Japan, Korea, Singapore, and the United States. UMC can be found on the web at http://www.umc.com

Note from UMC Concerning Forward-Looking Statements

Some of the statements in the foregoing announcement are forward-looking within the meaning of the U.S. Federal Securities laws, including statements about introduction of new services and technologies, future outsourcing, competition, wafer capacity, business relationships and market conditions. Investors are cautioned that actual events and results could differ materially from these statements as a result of a variety of factors, including conditions in the overall semiconductor market and economy; acceptance and demand for products from UMC; and technological and development risks. Further information regarding these and other risks is included in UMC’s filings with the U.S. Securities and Exchange Commission. UMC does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

Safe Harbor Statements

This release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended, and as defined in the United States Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by use of words such as “strategy,” “expects,” “continues,” “plans,” “anticipates,” “believes,” “will,” “estimates,” “intends,” “projects,” “goals,” “targets” and other words of similar meaning. You can also identify them by the fact that they do not relate strictly to historical or current facts.

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual performance, financial condition or results of operations of UMC to be materially different from what is stated or may be implied in such forward-looking statements. Investors are cautioned that actual events and results could differ materially from those statements as a result of a number of factors including, but not limited to: (i) dependence upon the frequent introduction of new services and technologies based on the latest developments in the industry in which UMC operates; (ii) the intensely competitive semiconductor, communications, consumer electronics and computer industries and markets; (iii) the risks associated with international business activities; (iv) dependence upon key personnel; (v) general economic and political conditions; (vi) possible disruptions in commercial activities caused by natural and human-induced events and disasters, including natural disasters, terrorist activity, armed conflict and highly contagious diseases; (vii) reduced end-user purchases relative to expectations and orders; and (viii) fluctuations in foreign currency exchange rates. Further information regarding these and other risks is included in UMC’s filings with the United States Securities and Exchange Commission. All information provided in this release is as of the date of this release and are based on assumptions that UMC believes to be reasonable as of this date, and UMC does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

The financial statements included in this release are prepared and published in accordance with Taiwan International Financial Reporting Standards, or TIFRSs, recognized by the Financial Supervisory Commission in the ROC, which is different from International Financial Reporting Standards, or IFRSs, issued by the International Accounting Standards Board. Investors are cautioned that there may be significant differences between TIFRSs and IFRSs. In addition, TIFRSs and IFRSs differ in certain significant respects from generally accepted accounting principles in the ROC and generally accepted accounting principles in the United States.

This presentation is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer or selling security holder and that will contain detailed information about the company and management, as well as financial statements.

¹ Unless otherwise stated, all financial figures discussed in this announcement are prepared in accordance with TIFRSs recognized by Financial Supervisory Commission in the ROC, which is different from IFRSs issued by the International Accounting Standards Board. They represent comparisons among the three-month period ending Mar 31, 2017, the three-month period ending Dec 31, 2016, and the equivalent three-month period that ended Mar 31, 2016. For all 1Q17 results, New Taiwan Dollar (NT$) amounts have been converted into U.S. Dollars at the Mar 31, 2017 exchange rate of NT$ 30.31 per U.S. Dollar.

² Revenue in this section represents wafer sales

³ Utilization Rate = Quarterly Wafer Out / Quarterly Capacity

⁴ Estimated capacity numbers are based on calculated maximum output rather than designed capacity. The actual capacity numbers may differ depending upon equipment delivery schedules, pace of migration to more advanced process technologies, and other factors affecting production ramp-up.

- FINANCIAL TABLES TO FOLLOW -

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheet
As of March 31, 2017
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
	March 31, 2017
	US$		NT$		%
Assets
Current assets
Cash and cash equivalents	2,006		60,812		16.0	%
Financial assets at fair value through profit or loss, current	29		867		0.2	%
Notes & Accounts receivable, net	689		20,878		5.5	%
Inventories, net	537		16,262		4.3	%
Other current assets	419		12,718		3.4	%
Total current assets	3,680		111,537		29.4	%
Non-current assets
Funds and investments	1,153		34,950		9.2	%
Property, plant and equipment	7,178		217,555		57.3	%
Other non-current assets	506		15,337		4.1	%
Total non-current assets	8,837		267,842		70.6	%
Total assets	12,517		379,379		100.0	%
Liabilities
Current liabilities
Short-term loans	622		18,842		5.0	%
Payables	875		26,525		7.0	%
Current portion of long-term liabilities	577		17,496		4.6	%
Other current liabilities	132		4,008		1.0	%
Total current liabilities	2,206		66,871		17.6	%
Non-current liabilities
Bonds payable	1,167		35,360		9.3	%
Long-term loans	889		26,952		7.1	%
Other non-current liabilities	1,106		33,515		8.9	%
Total non-current liabilities	3,162		95,827		25.3	%
Total liabilities	5,368		162,698		42.9	%
Equity
Equity attributable to the parent company
Capital	4,165		126,243		33.3	%
Additional paid-in capital	1,370		41,518		10.9	%
Retained earnings, unrealized gain or loss on available-for-sale financial assets and exchange differences on translation of foreign operations	1,739		52,692		13.9	%
Treasury stock	(156	)	(4,719	)	(1.2	%)
Total equity attributable to the parent company	7,118		215,734		56.9	%
Non-controlling interests	31		947		0.2	%
Total equity	7,149		216,681		57.1	%
Total liabilities and equity	12,517		379,379		100.0	%
Note：New Taiwan Dollars have been translated into U.S. Dollars at the March 31, 2017 exchange rate of NT $30.31 per U.S. Dollar.

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Comprehensive Income
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
Except Per Share and Per ADS Data
	Year over Year Comparison										Quarter over Quarter Comparison
	Three-Month Period Ended										Three-Month Period Ended
	March 31, 2017				March 31, 2016				Chg.		March 31, 2017				December 31, 2016				Chg.
	US$		NT$		US$		NT$		%		US$		NT$		US$		NT$		%
Net operating revenues	1,235		37,418		1,135		34,404		8.8	%	1,235		37,418		1,264		38,306		(2.3	%)
Operating costs	(990	)	(29,990	)	(969	)	(29,370	)	2.1	%	(990	)	(29,990	)	(975	)	(29,547	)	1.5	%
Gross profit	245		7,428		166		5,034		47.6	%	245		7,428		289		8,759		(15.2	%)
	19.9	%	19.9	%	14.6	%	14.6	%			19.9	%	19.9	%	22.9	%	22.9	%
Operating expenses
- Sales and marketing expenses	(38	)	(1,170	)	(33	)	(1,010	)	15.8	%	(38	)	(1,170	)	(43	)	(1,282	)	(8.7	%)
- General and administrative expenses	(35	)	(1,050	)	(32	)	(970	)	8.2	%	(35	)	(1,050	)	(50	)	(1,521	)	(31.0	%)
- Research and development expenses	(132	)	(3,991	)	(102	)	(3,085	)	29.4	%	(132	)	(3,991	)	(126	)	(3,824	)	4.4	%
Subtotal	(205	)	(6,211	)	(167	)	(5,065	)	22.6	%	(205	)	(6,211	)	(219	)	(6,627	)	(6.3	%)
Net other operating income and expenses	5		154		0		15		926.7	%	5		154		5		144		6.9	%
Operating income (loss)	45		1,371		(1	)	(16	)	-		45		1,371		75		2,276		(39.8	%)
	3.7	%	3.7	%	(0.1	%)	(0.1	%)			3.7	%	3.7	%	5.9	%	5.9	%
Net non-operating income and expenses	(10	)	(304	)	2		46		-		(10	)	(304	)	(40	)	(1,210	)	(74.9	%)
Income from continuing operations before income tax	35		1,067		1		30		3,456.7	%	35		1,067		35		1,066		0.1	%
	2.9	%	2.9	%	0.1	%	0.1	%			2.9	%	2.9	%	2.8	%	2.8	%
Income tax benefit (expense)	14		430		2		49		777.6	%	14		430		(20	)	(617	)	-
Net income	49		1,497		3		79		1,794.9	%	49		1,497		15		449		233.4	%
	4.0	%	4.0	%	0.2	%	0.2	%			4.0	%	4.0	%	1.2	%	1.2	%
Other comprehensive income (loss)	(98	)	(2,997	)	(20	)	(583	)	414.1	%	(98	)	(2,997	)	(20	)	(591	)	407.1	%
Total comprehensive income (loss)	(49	)	(1,500	)	(17	)	(504	)	197.6	%	(49	)	(1,500	)	(5	)	(142	)	956.3	%
Net income attributable to:
Stockholders of the parent	75		2,286		7		210		988.6	%	75		2,286		84		2,548		(10.3	%)
Non-controlling interests	(26	)	(789	)	(4	)	(131	)	502.3	%	(26	)	(789	)	(69	)	(2,099	)	(62.4	%)
Comprehensive income (loss) attributable to:
Stockholders of the parent	(20	)	(599	)	(12	)	(356	)	68.3	%	(20	)	(599	)	63		1,902		-
Non-controlling interests	(29	)	(901	)	(5	)	(148	)	508.8	%	(29	)	(901	)	(68	)	(2,044	)	(55.9	%)
Earnings per share-basic	0.006		0.19		0.001		0.02				0.006		0.19		0.007		0.21
Earnings per ADS ^(2)	0.031		0.95		0.003		0.10				0.031		0.95		0.035		1.05
Weighted average number of shares
outstanding (in millions)			12,208				12,408						12,208				12,208
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the March 31, 2017 exchange rate of NT $30.31 per U.S. Dollar.
(2) 1 ADS equals 5 common shares.

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Comprehensive Income
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
Except Per Share and Per ADS Data
	For the Three-Month Period Ended						For the Three-Month Period Ended
	March 31, 2017						March 31, 2017
	US$		NT$		%		US$		NT$		%
Net operating revenues	1,235		37,418		100.0	%	1,235		37,418		100.0	%
Operating costs	(990	)	(29,990	)	(80.1	%)	(990	)	(29,990	)	(80.1	%)
Gross profit	245		7,428		19.9	%	245		7,428		19.9	%
Operating expenses
- Sales and marketing expenses	(38	)	(1,170	)	(3.1	%)	(38	)	(1,170	)	(3.1	%)
- General and administrative expenses	(35	)	(1,050	)	(2.8	%)	(35	)	(1,050	)	(2.8	%)
- Research and development expenses	(132	)	(3,991	)	(10.7	%)	(132	)	(3,991	)	(10.7	%)
Subtotal	(205	)	(6,211	)	(16.6	%)	(205	)	(6,211	)	(16.6	%)
Net other operating income and expenses	5		154		0.4	%	5		154		0.4	%
Operating income	45		1,371		3.7	%	45		1,371		3.7	%
Net non-operating income and expenses	(10	)	(304	)	(0.8	%)	(10	)	(304	)	(0.8	%)
Income from continuing operations before income tax	35		1,067		2.9	%	35		1,067		2.9	%
Income tax benefit	14		430		1.1	%	14		430		1.1	%
Net income	49		1,497		4.0	%	49		1,497		4.0	%
Other comprehensive income (loss)	(98	)	(2,997	)	(8.0	%)	(98	)	(2,997	)	(8.0	%)
Total comprehensive income (loss)	(49	)	(1,500	)	(4.0	%)	(49	)	(1,500	)	(4.0	%)
Net income attributable to:
Stockholders of the parent	75		2,286		6.1	%	75		2,286		6.1	%
Non-controlling interests	(26	)	(789	)	(2.1	%)	(26	)	(789	)	(2.1	%)
Comprehensive income (loss) attributable to:
Stockholders of the parent	(20	)	(599	)	(1.6	%)	(20	)	(599	)	(1.6	%)
Non-controlling interests	(29	)	(901	)	(2.4	%)	(29	)	(901	)	(2.4	%)
Earnings per share-basic	0.006		0.19				0.006		0.19
Earnings per ADS ^(2)	0.031		0.95				0.031		0.95
Weighted average number of shares outstanding (in millions)			12,208						12,208
Notes:
(1) New Taiwan Dollars have been translated into U.S. Dollars at the March 31, 2017 exchange rate of NT $30.31 per U.S. Dollar.
(2) 1 ADS equals 5 common shares.

UNITED MICROELECTRONICS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statement of Cash Flows
For The Three-Month Period Ended March 31, 2017
Figures in Millions of New Taiwan Dollars (NT$) and U.S. Dollars (US$)
	US$		NT$
Cash flows from operating activities :
Net income before tax	35		1,067
Depreciation & Amortization	439		13,292
Changes in notes & accounts receivable	63		1,895
Changes in other current assets	(38	)	(1,149	)
Changes in payables	(43	)	(1,296	)
Changes in assets, liabilities and others	(17	)	(498	)
Net cash provided by operating activities	439		13,311
Cash flows from investing activities :
Acquisition of available-for-sale financial assets	(16	)	(481	)
Proceeds from disposal of available-for-sale financial assets	23		701
Proceeds from disposal of investments accounted for under the equity method	65		1,980
Acquisition of property, plant and equipment	(582	)	(17,654	)
Others	(28	)	(839	)
Net cash used in investing activities	(538	)	(16,293	)
Cash flows from financing activities :
Proceeds from bonds issued	274		8,300
Proceeds from long-term loans	74		2,258
Repayments of long-term loans	(29	)	(885	)
Acquisition of subsidiaries	(41	)	(1,228	)
Others	(19	)	(600	)
Net cash provided by financing activities	259		7,845
Effect of exchange rate changes on cash and cash equivalents	(54	)	(1,630	)
Net Increase in cash and cash equivalents	106		3,233
Cash and cash equivalents at beginning of period	1,900		57,579
Cash and cash equivalents at end of period	2,006		60,812
Note: New Taiwan Dollars have been translated into U.S. Dollars at the March 31, 2017 exchange rate of NT $30.31 per U.S. Dollar.